The Benefits Of Filing For Bankruptcy

Filing for bankruptcy under chapter 7 or chapter 13 is not an easy decision to make. While many people resort to this option as a last resort, it can turn out to be a blessing in disguise. After getting into deep debt, recrimination and self-pity will not help. Instead, starting over with a clean slate is a wise move. This guide will take you through some of the benefits of seeking legal protection.

Protect Your Property from Creditors

If you have creditors running after your property and income, securing protection can give you some breathing space. This comes in handy if the creditors did not take any form of lien on your property. Unlike the state law execution processes, bankruptcy exemptions allow you to protect a much greater portion of your property. In addition, creditors cannot take steps to garnish your income to settle outstanding debts. For people who are still working, this protects your monthly wages. It also comes in handy for employees who work for organizations that do not favor multiple wage garnishments.

Automatic Stay

After filing for protection, you will benefit from an automatic stay immediately. This stops creditors from trying to collect unpaid debts. Some of the actions that creditors cannot undertake include repossessions, foreclosures, evictions, garnishments, and attachments. With an automatic stay in place, you can rest assured creditors will not harass you anymore. If any creditor violates the stay, you have the right to report such actions to the court. Penalties include the awarding of financial damages and contempt of court charges.

Discharge of Debts

A bankruptcy attorney will be able to guide you through the process of discharging unsecured debts. Usually, this does away with your obligation to pay a wide range of debts. However, you may have to pay creditors who have a lien on your property. Apart from this exception, it is quite easy to have all other debts discharged. Creditors have no other option but to abide by the court order and stop harassing you for payments.

Negotiate With Creditors

Before applying for legal protection, your creditors will definitely have the upper hand. However, legal protection gives you the opportunity to negotiate with creditors on how to tackle debt payments. It is important to note that the Bankruptcy Code gives you the ability to negotiate with secured creditors. For example, you can easily eliminate certain types of liens if they impair exemptions. The same is true for liens that are worth more than the value of your property. If you file a chapter 13 bankruptcy proceeding, it is possible to have future payments on secured debts lowered significantly. At the same time, you can request for an extension of the repayment period. With these measures in place, it becomes easy for you to start paying off debts in an orderly fashion.

Professional Advice from bankruptcy Lawyers

The process of going through the court proceedings is not a walk in the park. You have to contend with legal jargon and regulatory requirements. A qualified lawyer can easily answer these bankruptcy questions and guide you through the entire process.

While nobody sets out to fall into debt, this can happen due to loss of employment, unexpected medical bills, as well as paying off student loans. When this happens, filing for bankruptcy may be the only option available. To get a good grasp of all the issues involved in the court processes, it is wise to seek advice from a bankruptcy attorney. This will ensure you get sound advice on bankruptcy questions as well as protection from creditors. The good news is the Bankruptcy Code provides adequate protection from any form of discriminatory action.